Tenant Fees Act Landlord must know

Tenant Fees Act landlord must know. The law is to protect tenants from paying excessive fees associated with renting a property in England. The Tenant Fees Act comes into effect from 1 June 2019.

Prohibited tenant fees from 1 June 2019

Private landlords and letting agents are banned to ask tenants to pay the following fees for tenancy contract entered into AFTER or on 1 June 2019.

  • Referencing
  • Administration
  • Inventory check-in and check-out report fee
  • Renewal of tenancy fees

Grace period

Except where tenants entered into a contract with you BEFORE 1 June 2019. In this circumstance, you can ask your tenants to pay for renewal and check out fees up to 31 May 2020.

However, if your tenant signed a tenancy renewal contract with you, say 13 October 2019 to 12 October 2020 then you cannot charge your tenant a renewal fee because the contract was signed after 1 June 2019 not before 1 June 2019.

Some letting agents were charging tenants renewal fees after the grace period claiming that they could do so up to 31 May 2020. This is unlawful. Your tenant can make a complaint to the enforcement authority.

From 1 June 2020, landlords and letting agents are banned to charge referencing, administration, inventory check-in, inventory check out report fee including tenancy renewal fee.

Permitted tenancy fees from 1 June 2019

If you are running a property letting business in England, you can ask your new tenants to pay the following.

  • The agreed rent.
  • a refundable 5 weeks tenancy deposit where the total annual rent is less than £50,000, or 6 weeks’ rent where the total annual rent is £50,000 or above.
  • Ask your potential tenant to pay one week refundable holding deposit to reserve your property. No more than 1 week.
  • Tenant to pay the associated early termination of the tenancy fee, when requested by the tenant
  • You can charge your tenant for the variation, assignment or novation of a tenancy. The payment is capped at £50 or reasonably incurred costs, if higher.
  • payments in respect of utilities, communication services, TV licence and Council Tax of the rented property.
  • a default fee for late payment of rent and replacement of a lost key/security device giving access to the housing, where required under a tenancy agreement.

Further reading about the Tenant Fees Act, click here.

Companies House filings

If you are running your property letting business through a limited company registered with Companies House, you must comply with the Companies Act too.

You can submit your company documents to Companies House online. You would require your company’s authentication code to do so. The authentication code is the electronic equivalent of your company’s director(s) signatures. Hence, you must keep it safe.

The documents you can file online includes:

Companies House has also created an interim paperless filing service to accept documents which would normally require a live signature during COVID-19 pandemic. You can easily upload your documents to the Companies House website.

If you require help with your company’s filings, contact our accountants. They will be more than happy to assist you.

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